Hong Kong stocks fell by the most in more than three weeks, with Alibaba Group Holding and banks leading decliners, as investors assessed China’s newest economic data and the impact of possible US sanctions on the city’s businesses.
The Hang Seng Index slid 2.1 per cent to 24,158.54 at the close on Thursday, the steepest decline since September 21. The Shanghai Composite Index dropped for a second day, losing 0.2 per cent to 3,332.18.
Prices at factory gates declined 2.1 per cent in September, widening from 2 per cent a month earlier, China’s statistics bureau said on Thursday morning. That suggests local manufacturers are struggling to regain pricing power, even as the economy begins to recover after the coronavirus pandemic. Data on industrial inflation tempered the better-than-expected credit growth numbers released by the central bank and a stronger external trade numbers earlier this week.
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The bureau is also expected to release the data on third-quarter economic growth on Monday. China’s growth probably accelerated to 5.4 per cent over the past three months from 3.2 per cent for the previous quarter, according to Bloomberg data.
Markets across the Asia-Pacific region also retreated after US stocks slipped in overnight trading amid disappointing earnings reports from Wells Fargo and Bank of America. Meanwhile, Treasury Secretary Steven Mnuchin downplayed the chances of striking a stimulus deal before the November 3 presidential election.
“The market seems to have got a little ahead of itself in pricing in a pro fiscal, political landscape [after the presidential election],” said Stephen Innes, a strategist for global markets at Axi. “Asian markets could suffer the hangover effect from the US market.”
Alibaba, the owner of this newspaper, sank 4.3 per cent to HK$284.80 for the steepest loss since July 14. It was the worst performer among the Hang Seng Index members. Only two of the 50 members avoided losses on Thursday.
Tencent Holdings dropped 3.8 per cent from a record high to HK$552.
Sentiment on the e-commerce group weakened following a Reuters report that its affiliate Ant Group may be added to a trade blacklist by the Trump administration. The US State Department submitted a proposal to add the mobile-payment operator to its Entity List, Reuters added, citing people it did not identify.
Lenders slipped on concern they will face sanctions by the US. HSBC declined 2 per cent to HK$29.90 while its subsidiary Hang Seng Bank slumped 2.3 per cent to HK$113.80. Standard Chartered shed 2.1 per cent to HK$35.65.
Financial institutions doing business with those deemed responsible for undermining Hong Kong’s autonomy may face sanctions, the US government said on Wednesday, following a State Department report to Congress relating to the Hong Kong Autonomy Act.
On the mainland’s exchanges, Yihai Kerry Arawana Holdings, which produce kitchen food from oil to rice, surged 118 per cent from its initial public offering price to 56 yuan on the first day of trading in Shenzhen. Another debutant Shanghai Holystar Information Technology, a maker of power distribution equipment, gained 23 per cent to 108.50 yuan in Shanghai.
In Seoul, Big Hit Entertainment soared by as much as 160 per cent on its market debut, valuing the agency managing K-pop superstars BTS north of US$10 billion. The broader market was downbeat, however, with the Kospi Index slumping 0.8 per cent.
More from South China Morning Post:
- Tencent’s record high props up Hang Seng Index as Xi Jinping’s Shenzhen speech fails to add fuel to China’s stock market rally
- China’s stocks surge on economic recovery sign as bulls return from ‘golden week’ holiday, Hang Seng Index retreats on virus concerns
- US State Department proposes adding China’s Ant Group to trade blacklist, insiders say
- Hong Kong brokers tout lower costs for retail investors seeking to buy into Ant Group’s IPO after US$12.9 billion of inflows drags interest rate down
This article Hong Kong stocks retreat most in three weeks as Alibaba, HSBC tumble, BTS jumps in Seoul debut first appeared on South China Morning Post